3 Renter Gotchas

It’s already hard enough to find an affordable home or apartment to rent (especially if you live in one of these cities). Rental prices are rising fast around the country, even in unexpected places like Kansas City and Portland. But as more people turn to online help to find a decent home, there are more scams and gotchas to worry about, too.

First, let’s look at prices. Nationwide, rents are up about 3% in the past year, according to Zillow, with median rental cost at $1,350 monthly. That increase is not out of line with historical trends, but as we say often, all real estate is local. And in most major markets, rents are up a lot more than that. Seattle is up 5%. Charlotte is up 6%. Portland, 7%. And when you get to Denver, San Jose and San Francisco, you’re looking at double-digit increases.

To put things in perspective, since the year 2000, rents have risen at twice the rates of wages — and that’s a problem for everyone, even homeowners.

“Today’s renters are tomorrow’s buyers, but with more income devoted to rents, less is socked away in savings accounts for an eventual down payment on a home,” Zillow notes. One factor (of many) that is stifling the housing market is lack of new buyers.

Rents are so high that RealtyTrac recently published data saying that buying is more affordable than renting in 76% of U.S. markets — but that’s only true for renters who have socked away cash for a down payment. With so much income going to rent, amassing a 10% down payment gets harder and harder.

All this means that searching for the right apartment at the right price is more important than ever, and the Internet is the obvious place to look. Craigslist has long been one of the most popular places to hunt. There are plenty of new entrants, however. For starters, HotPads and Lovely put usable front ends on top of Craigslist data, so they are helpful. Mobile, location-based apps like RadPad have obvious advantages if you are walking around a city looking for places. Trulia, known primarily as a homebuyer site, is good for renters who want something bigger than an apartment.

But scammers invade all these sites. They know that apartment hunters are particularly vulnerable. Many are looking remotely, before a move, and have to trust information — and sometimes money — sent over long distances. Showing up at unknown addresses and chatting about finances with strangers always poses some risk. At some point, renters have to give a potential landlord their personal information. Most of all, renters are almost always under pressure. They have to get a place within a couple of days to move out of corporate housing or their friend’s basement or whatnot. Put all those things together and you have a recipe for disaster.

As a renter, you simply must take the attitude that any potential landlord might be a scam artist. After all, landlords look at you that way. So here’s three things to watch for.

1. Simple Identity Theft

The most common rental scam, and the easiest to pull off, involves identity theft. Criminals post fake ads and trick renters into filling out some kind of application, which always requires enough information for the criminal to open up fake accounts in the victim’s name.

Antidote: Never surrender any information until you’ve seen the place, and the landlord, in person. One trick that’s sometimes successful: Get your free annual credit reports at AnnualCreditReport.com, blot out the Social Security number and other personal information, and offer that as a credit check to a landlord. Many won’t go for it, but some will. It can at least be used as a stall tactic while you are determining if the landlord is legit. (It’s also a good idea to keep an eye on your credit reports and credit scores, especially during this period. You can get your free credit report summaries on Credit.com to monitor for any changes — for example, new credit you didn’t apply for — that could signal a problem.)

2. The Prepayment Scam

Another common rental scam involves getting a would-be renter to send money for an apartment that doesn’t exist, baited by a fake listing that’s been pilfered from another rental site. That’s usually a hard sell, so scammers add a wrinkle. They concoct an elaborate story about traveling, or an illness and create a sense of urgency — mainly by suggesting the rental is a great deal that’s about to disappear. Then, they ask for a form of payment that’s hard to reverse, such as a wire transfer or prepaid card as a deposit, or to cover the first month’s rent. While these scams are often attempted on long-distance renters, that’s not always true. Some victims are even advised to drive past the not-really-for-rent apartment, giving them a false idea that the real estate actually exists.

Antidote: Don’t send money before you see the inside of the place.

3. Scammers Revenge

Kelly Kane, who was hurriedly looking for an apartment in Massachusetts after the ceiling in her current pad collapsed, found out the hard way that scammers have a nasty new way of exacting revenge when consumers don’t fall for their ploys. After she called out a would-be con artists on a fake ad, her cellphone number was plastered as the contact across hundreds of ads on Trulia.com. Kane’s phone was ringing off the hook for more than 24 hours before she was able to get the bogus listings pulled down.

“I’m guessing it was for spite,” Kane said. “My phone has rang about 20 times from states all over the U.S. with people responding to these sketchy ads. Sad thing is, I spoke with some of the people and one woman said she was so sick of dealing with these scams and made it sound like she’s had several she’s dealt with.”

Kane isn’t alone: There are several other complaints about the phenomenon on Trulia’s message boards.

Antidote: This is a tough one. It’s hard to hunt for an apartment without sharing your phone number with strangers. Your best bet is to be really judicious about emailing your numberbefore you speak to a would-be landlord — try calling first. And if that doesn’t work, be very suspicious of too-good-to-be-true listings, or even a-little-too-good-to-be-true listings.

What do all these scams have in common? They all involve a cover story that prevents hunters from seeing the inside of any apartment before some important transaction or information transfer takes place. Knowledge is power. No matter how elaborate the tale, keep bringing the story back to its basics. Is the landlord insisting on getting money or personal information before showing off the place? If so, something is almost certainly wrong.

This article originally appeared on Credit.com and was written by Bob Sullivan.